In an effort to gain the support of minority voters, President George W. Bush recently unveiled his new plan to grow home ownership for people of color. By the end of the decade, Bush hopes to increase minority home ownership — now at 13 million — by 5.5 million to close the gap between the number of minority and Caucasian home owners.
The major barriers Bush plans to tackle are high closing costs, predatory lending, insufficient housing options, and an overly complicated buying process. According to recent Census Bureau statistics, three-quarters of Caucasian Americans are home owners while less than half of minorities own their homes.
Despite the president’s efforts to improve minority ownership, some not only question his methods but also his motive. Political analyst Earl Ofari Hutchinson describes the plan as “much too little, but not too late.” Hutchinson sees three major flaws with the presidential housing plan, including underfunding, continued redlining by lending institutions, and a lack of overall commitment to low-income housing. “Bush is proposing $200 million in federal funds for 40,000 families,” Hutchinson says. “The problem with that is it’s still just a drop in the bucket. The housing crisis in America, particularly with African Americans, is so chronic and critical that $200 million is almost an insult.”
Under the plan, mortgage financiers such as Fannie Mae and Freddie Mac would allocate $440 million in loans to potential minority home owners. A $2.4 billion tax credit would be granted to housing developers building low-income, single-family housing units over the next five years. In addition, financial counseling would be provided to some 380,000 families.
Bush plans to also convene a conference on the barriers to minority home ownership, which will focus on issues such as racism within the mortgage industry and predatory lending. The president also proposed a streamlining of the home-buying process itself.
David Bositis, senior research associate for the Joint Center for Political and Economic Studies, is skeptical of the plan. “If you don’t have substantial gains in black employment and black income, there is a limit in terms of what you’re going to see in home ownership because [blacks] are not going to be able to afford homes if they’re not employed and don’t have sufficient income.” Bositis foresees the problem of applicants being able to “squeak” into the new programs, but then being unable to keep up with their mortgage payments. Bositis says he’d “want to see strong evidence that this policy was effective before I would think it was something other than political.”
Congresswoman Stephanie Tubbs Jones (D-Ohio), who leads the Congressional Black Caucus’ Affordable Housing Legislative Working Group, says she’s pleased with the president’s focus on minority housing issues but agrees that the effort is not enough. Jones says the key to home ownership will ultimately rest with the individual. “Get your credit report and sit down with a credit advisor and plan your journey to wealth,” says Jones. “Many people go down the road to wealth through home ownership. The largest asset we can pass from